Speech Summaries

Mark V. Stabingas Vice President, Worldwide Business Development and Services Sales Amazon.com

What's Next For Amazon?

Mark V. Stabingas, Vice President, Worldwide Business Development and Services Sales, Amazon.com, talked about the evolution of Amazon.com. Amazon’s Web site first came to be in 1995, and so much has changed for Amazon and eCommerce since then. Amazon evolved from a retailer to a retail platform. Evolution began when Amazon first let other retailers sell on its Web site in the late 1990s. Its first services arrangement was with Toys"R"Us in 2000.

There is a misconception that Amazon invested most of its money in fulfillment infrastructure. It did invest about $300 million there. But it spent much more money on customer acquisition and marketing (about $700 million), and even more money on technology investments (about $1.1 billion). Amazon is a technology services company in the retail business and this is why retailers work with Amazon.

Amazon has robust fulfillment capabilities, global customer service (24x7x365), professional services on top of retail capabilities (business account management, fulfillment and customer service, platform integration, and technical support), has extended control to partners, gives control to the edge of the screen (same platform as Amazon, but the individual retailers can control it), and enables multichannel capabilities. Therefore, Amazon services are a huge part of Amazon’s business today. This is the forefront of Amazon’s future.

Questions And Answers

Q: Can you give some specifics on the technology that Amazon uses?

A: We run on Linux, which has received much publicity. However, much of our technology is built internally because we did not think that we could find it externally.

Q: Looking at the Amazon home page, there are some non-core things on here. How does Amazon decide what is meaningful enough to go on the home page?

A: The answer is data. Every feature appearing on our home page is tested for its impact on conversion, and they all have shown that they positively impact conversion. We have a Web lab that is responsible for the testing.

Q: Do you fear that constant innovation (partnerships, etc.) has confused the customers about what the Amazon brand is?

A: There has been an evolution of thinking of Amazon as a retailer into thinking of Amazon as a retail platform. However, I do not think that customers are confused, because they have consistency with their experience; for example, we have their credit card information and we do not need to ask for it again now that Amazon has evolved.